HHS Releases Second Round of Provider Relief Funds

This blog was written and produced by Margaret Lally, Healthcare Consulting Manager at The Bonadio Group. Looking to get in touch with Margaret? Reach out today: mlally@bonadio.com.

As part of the CARES Act, signed on March 27, 2020, a $100 billion Provider Relief Fund was created to address the economic harm to providers due to the suspension of elective procedures, the increase in the uninsured population, and the expense associated with providing treatment for COVID-19. $50 billion of this fund was designated as a general allocation to Medicare facilities and providers. The initial $30 billion was distributed electronically on April 10, 2020 and the second $20 billion will be released on a rolling basis beginning on April 24, 2020.

Why am I receiving these funds?

In order to mitigate the financial strain placed on healthcare providers due to the COVID-19 global pandemic, Congress created the $100 billion provider relief fund to quickly infuse cash into the healthcare system. The funds are intended to help providers prepare, prevent, and respond to COVID-19 and may be used for healthcare expenses related to COVID-19 and to offset lost revenue attributable to COVID-19.

How was the amount determined?

The first round ($30 billion) was approximately 6.2% of 2019 Medicare FFS net reimbursement. Given that the first-round disadvantaged providers with low Medicare utilization, the second tranche ($20 billion) is calculated such that the total of the two payments is 2% of 2018 total net patient revenue as reported on the 2018 Medicare Cost Report.

Do providers have to pay this back?

This money is a grant and will not have to be repaid, however, providers will have to attest to the terms and conditions found here. These conditions must be attested to within 30 days via an online portal. HHS will assume consent if a provider does not contact HHS within 30 days to return the payment.

What do I have to do next?

Accept the terms and conditions for payment 1 and payment 2 via the online portal and verify revenue numbers using the separate online General Distribution Portal. Check back here soon for a forthcoming article detailing the terms and conditions!

What if I didn’t receive the first or second batch?

Providers who are not required to submit a cost report or whose 2018 Medicare cost report did not report revenue numbers, for example, a provider who filed a low-utilization waiver, must use the General Distribution portal to report revenue and to potentially receive a distribution.

For more information, contact your Bonadio Healthcare Team advisors.

The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We therefore make no warranties, expressed or implied, on the services provided hereunder.